Losing your job hurts now… and later too

A recent poll by the New York Times and CBS has highlighted the link between being jobless and a number of mental health issues including depression, anxiety, and insomnia. Unemployment is undoubtedly linked to one’s self-esteem and personal happiness during the period of joblessness but how does unemployment affect people after they return to a job?

Most research on how people perceive their own well-being (subjective well-being) has suggested that people have a relatively stable baseline level of happiness, which, although it can be temporarily altered by a traumatic event, is unchanged in the long-run. However, according to work by Lucas and colleagues (2004), our set points of well-being can actually be changed permanently, at least in the case of unemployment. After conducting a 15-year longitudinal study, the authors found that periods of unemployment lowered people’s baseline levels of life satisfaction long after they returned to a job, even when controlling for income. In fact, the larger the drop in life satisfaction during unemployment, the more likely that one’s set points of happiness remain drastically lower than they were pre-unemployment, even many years later. Furthermore, the researchers suggest that those whose life satisfaction suffer greatest during unemployment are also more likely to face unemployment later in life.

So, not only does having lost your job hurt right now, being unemployed can alter your long-term life satisfaction; and a drastic drop in your long-term subjective well-being can lead to further incidents of unemployment.